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Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution

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Author Info
Firouz Gahvari
Enlinson Mattos

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Abstract

This paper examines the role of cash transfers as a screening device when combined with in-kind transfers. It shows that linking in-kind to cash transfers makes first-best redistribution possible despite the government's inability to tell rich and poor individuals apart. Moreover, the maximal attainable welfare for the poor can be pushed beyond its first-best level by distorting downward the quality of the indivisible good the poor receive relative to the cash value of their net transfers. Using in-kind transfers alone, as in Besley and Coate (1991), leads to a third-best solution. (JEL D31, H23, H41)

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File URL: http://hdl.handle.net/10.1257/aer.97.1.491
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File URL: http://www.aeaweb.org/articles/article_detail.php?journal=AER&volume=97&issue=1&article=24&issue_date=March2007
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Publisher Info
Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 97 (2007)
Issue (Month): 1 (March)
Pages: 491-502
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Handle: RePEc:aea:aecrev:v:97:y:2007:i:1:p:491-502

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Gahvari, Firouz, 1994. "In-kind transfers, cash grants and labor supply," Journal of Public Economics, Elsevier, vol. 55(3), pages 495-504, November. [Downloadable!] (restricted)
  2. Gahvari, Firouz, 1995. "In-Kind versus Cash Transfers in the Presence of Distortionary Taxes," Economic Inquiry, Oxford University Press, vol. 33(1), pages 45-53, January.
  3. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September. [Downloadable!] (restricted)
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  4. François Bourguignon & Francisco H. G. Ferreira & Phillippe G. Leite, 2002. "Ex-ante Evaluation of Conditional Cash Transfer Programs: The Case of Bolsa Escola," William Davidson Institute Working Papers Series 516, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  5. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-77, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Enlinson Mattos, 2007. "Cash-Cum-In-Kind Transfers, Tax Rates And Labor Supply: Qualifying The Record," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 020, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  2. Hanming Fang & Peter Norman, 2008. "Toward an Efficiency Rationale for the Public Provision of Private Goods," NBER Working Papers 13827, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Raschky, Paul A. & Schwindt, Manijeh, 2009. "On the channel and type of international disaster aid," Policy Research Working Paper Series 4953, The World Bank. [Downloadable!]
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  4. Kazianga, Harounan & de Walque, Damien & Alderman, Harold, 2009. "Educational and health impacts of two school feeding schemes : evidence from a randomized trial in rural Burkina Faso," Policy Research Working Paper Series 4976, The World Bank. [Downloadable!]
  5. Paul A. Raschky & Manijeh Schwindt, . "Aid, Catastrophes and the Samaritan's Dilemma," Working Papers 2008-06, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
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